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Wed Oct 22 2008 16:40:11

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

By: Ina Steiner

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Amazon.com announced great third-quarter sales (up 31% year over year) - they'll have a conference call at 5pm where I hope they will share more on 3rd party sales. Here's part of their statement released ~ 4pm today.

Amazon.com Announces Third Quarter Sales up 31% to $4.26 Billion; Sales Growth Fueled by Lower Prices, Expanded Selection and Free Shipping

SEATTLE--(BUSINESS WIRE)--Amazon.com, Inc. (NASDAQ:AMZN) today announced financial results for its third quarter ended September 30, 2008.

Operating cash flow was $1.27 billion for the trailing twelve months, compared with $1.0 billion for the trailing twelve months ended September 30, 2007. Free cash flow increased 21% to $0.97 billion for the trailing twelve months, compared with $0.80 billion for the trailing twelve months ended September 30, 2007.

Common shares outstanding plus shares underlying stock-based awards outstanding totaled 448 million on September 30, 2008, compared with 435 million a year ago.

Net sales increased 31% to $4.26 billion in the third quarter, compared with $3.26 billion in third quarter 2007. Excluding the $80 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales grew 28% compared with third quarter 2007.

Operating income increased 26% to $154 million in the third quarter, compared with $123 million in third quarter 2007. Excluding the $5 million favorable impact from year-over-year changes in foreign exchange rates throughout the quarter, operating income grew 22% compared with third quarter 2007.

Net income increased 48% to $118 million in the third quarter, or $0.27 per diluted share, compared with net income of $80 million, or $0.19 per diluted share, in third quarter 2007. Net income includes a benefit of $15 million related to net foreign currency remeasurements.

"We remain relentlessly focused on delivering value to customers through lower prices, improved selection and our free shipping offers, including Amazon Prime," said Jeff Bezos, founder and CEO of Amazon.com. "Customers saved more than $700 million with our global free-shipping programs over the past twelve months, and we expect more customers than ever will take advantage of the benefits of Amazon Prime this holiday season."

A conference call will be webcast live today at 2 p.m. PT/5 p.m. ET, and will be available for at least three months at www.amazon.com/ir. This call will contain forward-looking statements and other material information regarding the Company’s financial and operating results.

Update 10/223/08: See today's AuctionBytes Newsflash article.




Comments (9) | Permalink

Readers Comments

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook   Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

by: CASHBACK

Wed Oct 22 19:25:29 2008

Right now Amazon stock is a great buy. When investors compare eBay and Amazon they often overlook the facts which really puts Amazon in the lead:

* Amazon is a retailer + a search engine.
* eBay is ONLY a search engine.

Amazon wins for SELLERS because:
1. There's no per product listing fee and it doesn't cost you a penny until your product sells.
2. Amazon makes it easy to have a branded online store.
3. Blog authors can monetize their sites with loads of help from Amazon.
4. If have the digital rights to a book, you can make it available as an eBook on Amazon.com (eBay banned digital items March 31, 2008).
5. You can get a free 30-day trial to open your store!

Amazon wins for BUYERS because:
1. Buyers can shop without commitments (wish lists and shopping carts)
2. the personalized shopping experience helps buyers find what they need
3. Feedback doesn't feel compulsary as it does in eBay's forum
4. Amazon estimates delivery time, while eBay leaves sellers guessing.
5. Amazon streamlines packaging tracking.

Amazon is wise to reduce the outlook for the remainder of the year. With severe daily market swings the future of our economy remains fragile; however, for those of us who have sold in both environments, the outlook is clear that Amazon has a strong future as the front runner, while eBay understands that it is the underdog.

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook   Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

by: Another powerseller

Wed Oct 22 21:46:58 2008

The Amazon results prove that ebay's dismal Q3 performance wasn't due to the economy.

People also need to really see that Ebay aren't trying to model their platform on Amazon; its not possible (because of the reasons in the above post).

They are trying to convert the ebay  platform into Ebay Express. Ebay Express was up for two years and it failed.

Why are ebay copying a failed business model?

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook   Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

by: Tired

Wed Oct 22 22:35:58 2008

Good for Amazon!

They will probably have a kick a$$ 4th quarter also.

EBay will certainly be in the toilet bowl and it is well deserved based on their actions this year. DISGUSTING!  

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook   Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

by: Raid Ebay

Wed Oct 22 23:01:09 2008

My prediction is Ebay will collapse on something that hasn't had much attention and that is discrepancies and inaccurate billing and a poor system in place to deal with customer billing issues. I believe most sellers find it difficult to find needles in the confusing billing haystack but I would bet based on my experience that billing inaccuracies are more widespread than anybody would ever imagine. If this company and its top executives have knowledge of this we are potentially looking at another failed company and ripped off investors.

Could be just an isolated case, but I find the frequency of issues, glitches and poor customer service has led potentially to clear abuse of the way Ebay runs its billing operations and in my opinion has led to a false accounting for its profits and health of its company.

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook   Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

by: Ruth

Thu Oct 23 02:32:32 2008

Amazon treats their sellers as equals, while eBay treats their sellers like dirt. That is why Amazon continues to grow while eBay is fading away. It's really that simple...

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook   Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

by: Keith

Thu Oct 23 06:35:39 2008

It has been painfully obvious to everyone that sells on eBay that things are not where they should be.  It is just a matter of time before the whole company implodes in on itself.

Amazon's results for Q3 are just one more example that eBay is going to crash very soon, a fatal crash I may add!

Everyone who has posted so far is most likely correct with their assumptions.  The ultimate door closer will be when there are NO BUYERS LEFT!!!

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook   Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

by: another PS

Thu Oct 23 07:27:26 2008

Sorry to go off-topic,
but the DSR / discount in seller dashboard is down AGAIN; of course right during the time when ebay figures out how much of a discount sellers get. This is a monthly issue with them,, always at the same time! Do they still call it a "glitch"???

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook   Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

by: stockgirl

Thu Oct 23 20:44:46 2008

Any seller will tell you that Amazon stock is a great buy right now for investors in for the long haul. If this were a normal economy, it would be worth $80+

On the contrary, eBay stock is a bad investment. I don't get why is eBay's stock at $15.32 when it should be MUCH, MUCH LOWER. eBay is BLOWING it with sellers. I'd price eBay stock at $8.87.

Amazon Great Q3-08, But Reduces Full-Year Profit Outlook   Amazon Great Q3-08, But Reduces Full-Year Profit Outlook

by: o.c.d.collectibles

Sat Oct 25 21:46:45 2008

I'll probably purchase ebay stock when it tanks so bad that they finally decide to either sell the company to someone else, or fire the chief for non-performance. Either way, when they come to their senses, the price will eventually go up again. I am hoping that the stock hits $3-$4 soon so I can purchase it.

If they would only figure out that the "flea market sellers" are what made ebay the success that it was, it would out them in a category that is quite different than Amazon. Amazon is limited in what it sells. The prices are not really lower, and the fvf is high, there too.
If there was a vintage area to sell where they allowed non barcoded stuff, I would give them a try. But for antiques and collectibles, there really isn't much of an audience there.



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